How the Future of Grocery Retail Is Shaping Up

As data and technology become ever more ubiquitous in grocery stores, grocery executives expect the impact of these tools only to increase, according to a new report from professional services network Deloitte, “The Future of Grocery Retail,” which looks at how the markets, models and mechanics of the sector are evolving amid the ongoing effect of technology and changing consumer preferences. The report is based on a survey conducted by London-based Deloitte this past June and July of 100 senior executives from U.S. grocery retailers with more that 10,000 employees on the future of the industry.

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Among the key findings of the report:

• 87% of grocery retailer executives surveyed said that the marketing of groceries will become hyper-personalized, indicating a market shift from selling to the “average consumer” to a more individualized approach.
• Nearly half of executives predicted that national-brand CPG partnerships would become less important over time as retailers add more store-brand offerings and as CPG companies look into more direct-to-consumer offerings.
• Four in 10 executives anticipated that store-managed food production (such as vertical farming) would be implemented for most of their stores in the next five to 10 years.
• In the next five to 10 years, grocery executives said that they expected technology to enable reduced or no checkout experiences (66%); hyper-personalized, guided shopping (65%); and tailored experiences and sampling for individual customers (63%).
• In the midst of various dynamics that have executives redefining the mechanics of their workplace, 84% said that the store associate experience needs to be as good as the consumer experience.

“Knowing the forces acting on the industry and their implications for grocery’s markets, models and mechanics is a starting point, but the future of grocery retail will likely need to be an ongoing conversation,” wrote the report’s authors, Danny Edsall, Christopher Gray, Jamie Witherspoon and Maureen McDonnell. “And it can play out differently for different companies. To make these changes, some may need to first grapple with culture, ownership or organizational structure. Others may need to confront the reality of their current physical footprints. How to make the kinds of investments required on already thin margins while also addressing near-term priorities presents a barrier for many.”

The authors went on to advise grocery retailers that “it’s important to choose those [solutions] that are [the] best fit for you and your customers.”